Black Friday is huge for many stores, big and small. But for the past couple of years, two giant retailers have battled to dominate the shopping extravaganza with the best deals and the most customers: Amazon and Walmart.
Both have the scale and know-how to negotiate the cheapest prices and stock the most popular items. For Black Friday 2011, however, shoppers would do well to look beyond the two giants for the best deals. Some retailers are beating Walmart's prices on big ticket items. And Amazon is being cagey again this year, so it's impossible to know what will be on sale.
“Amazon is always a wild card,” says Michael Brim, founder of BFAds.net, a website that tracks Black Friday deals. “Since they’re entirely online, they don’t have to publish a physical Black Friday ad. We don’t know their prices until day of, but they’re always ultra competitive. They don’t have a traditional price-matching system, but they will always scour competitors’ prices and put the same items or a similar item up for a lower price, on a wide variety of items.”
Both retailers retain their traditional strengths; “In Walmart’s case, it’s market cap and buying power,” says Mr. Brim. “They push more product, so they can cut their prices more often and take more losses than their competitors can.“
“Amazon is just an efficient model. They do one thing, online shopping, and they do it right, without the same constraints as their bricks-and-mortar competitors,” he says.
In many ways, the Amazon/Walmart duel is a microcosm of the larger question of whether online or in-store shopping makes more sense. That battle is growing ever more heated as the online retail sector continues its rapid growth. Online retail sales are expected to eclipse $50 billion for the first time in the fourth quarter of 2011, according to projections from Erik Johnson, an economist with IHS Global Insight.
There's every reason to take advantage of both online and traditional retail stores, depending on what you're looking for.
Because it has no limit in terms of inventory, Amazon can boast a bigger selection than Walmart, particularly in the entertainment and electronics categories. “Definitely with the books, videos, computer games, and all that stuff, Amazon is the leader,” says Max Levitte, founder and CEO of cheapism.com, an online deal site.
There’s also the luxury of pre-ordering hot-ticket items, rather than “going all the way out to a store and staring at an aisle of empty shelves,” as Mr. Levitte puts it. In most cases, Amazon wins the price game as well, in part because it isn’t required to collect sales tax in most states. It also has some of the best shipping deals around: many items qualify for free standard shipping, and a $79 per year Amazon Prime subscription gets you unlimited free two-day shipping.
But there's more to shopping than getting the right price. And Walmart, ironically, has somewhat of a little guy’s advantage when it comes to customer service, despite being 10 times bigger than its online competitor. (Walmart’s revenue was $421.8 billion last year; Amazon’s was $34.2 billion).
For one, Walmart’s 90-day full refund, no-questions-asked return policy is much better than that of Amazon, which recently got rid of free shipping on returned items. Now, the shipping price comes out of your store credit refund unless the return was a result of a company error.
For another, Walmart's inventory is easier to see. Because the inventory is so vast, Amazon’s indexing of merchandise can be complicated to navigate, according to Mr. Levitte. “It’s too large, and it’s difficult to tell if it’s being sold on Amazon or Amazon Marketplace, where the prices are higher.”
Finally, Walmart also offers free assembly on any item that might need it, including furniture, bicycles, grills, and complicated toys
The retail giant certainly has made more 2011 headlines than Amazon thus far, releasing its Black Friday ad earlier than ever and making certain Black-Friday priced items available as early as 10 p.m. on Thanksgiving Day. “Just across the board, they have bigger budgets for everything, including ads, “ says Brim. “It’s not really possible for Amazon, or anyone else, to compete pound for pound.”
Despite that extra ad power, Brim points out, Walmart’s Black Friday deals themselves have been lackluster.
“This year both Best Buy and Target have edged out Walmart by a pretty decent margin,” he says. “What really drives people’s attention are the doorbuster ads on a store’s top five or six items, generally laptops and televisions.” On that front, Best Buy, and occasionally Target, are consistently beating Walmart.
Walmart boasts a holiday price guarantee: If you find a particular item offered at a better price by a local competitor, the store will give you the difference in the form of a gift card. The deal even works retroactively: If you bought a toaster from Walmart last week, and Target offers a cheaper price on the same toaster in December, you can bring the competitors’ ad to Walmart any day up until Christmas and claim a refund for the difference.
But the exceptions are huge. The price-matching guarantee doesn’t apply to Black Friday pricing, or to any prices offered by online vendors, like Amazon, Brim says. “As is, the Christmas price guarantee isn’t such a great package.”